The last post

This is the final of three posts. Judging by reaction to the first two, it could be my last. This week the goal of this pathetic blog was to underscore economic conditions, look at Canadian real estate, and give you an assessment on what happens next. Whether you like it or not.

Recall, you were told this day would come. For years the warning has been the same: there will be a correction, then a melt. But no US-style property Armageddon. No 50% decline. No 70% Phoenix-style Hoovering. The only way such an event could occur would be if conditions here mimicked those in the States when that market crashed. A serious recession. Double-digit unemployment. No available credit. And a housing market where people were too pooched or terrified to buy.

That’s not happening. Get used to it. So when a 30% price drop comes along (swaths of the 905) or a 14% trimming of values (Toronto), or stagnation (Calgary, Ottawa, Halifax), maybe you should take notice, and take action. This is simply because it’s now evident (to this blog, anyway) conditions have changed. The Mills are getting unexpectedly aggressive about real estate (look at those ridiculous condo sales), and the economy is about to move forward. The low-rate, low-yield, low-growth years are over. Just watch the US jobs numbers on Friday morning for proof.

This is not to say house values are about to swell. They’re not – for a while. And BC has not yet even felt the ding of the Dippers. But in many other markets, and hoods, waiting for a massive collapse is futile. You might want to take advantage of sellers who this week woke up to these headlines:

Toronto home prices see biggest drop in almost 30 years.
Financial Post

Vancouver home sales fell twise as fast as a bank thought they would after BC NDP’s new taxes.
Global News

Taxes sinking Vancouver’s detached-house sales
Business in Vancouver

Speculation tax expected to impact West Vancouver
Vancouver Courier

Such media coverage is a serious issue, and a market-maker. Real estate runs on confidence, hormones and cheap money. When buyers swarm in and rates are low, prices spike. When it’s perceived prices could start to decline, or fall further, buyers sit on the sidelines (the comment section here is a great example), sniping and telling each other they’ll go lower. The last great example was after the credit crisis, when Toronto prices plopped 15%. Did buyers rush in? Of course not. The market were dormant. As is currently happening in many places.

So, the advice remains. If you want, crave and can swing a house without gutting your finances, try it. Offer what you can afford to people increasingly anxious about selling. Here’s a strategy:

Get an agent to front you, but don’t sign a BRA. I’ve explained why many times.

Suggest a reasonable price you think is fair and affordable. If it’s a ridiculous low-ball offer the buyer may ignore you or sign it back for full price. In both cases, you’ve created animosity which won’t help going forward.

Include lots of conditions, even if you don’t need them. Financing, Home inspection. Water and septic (in the country). You can always strike them to assist in getting a better price as the negotiation goes forward.

Don’t make the irrevocable too short. People under pressure don’t cooperate.

Never offer after one showing. Go two or three times. Build the drama. You can afford to do this in a market with little buyer competition.

Big deposits always help get lower prices.

Don’t be too hasty with the sign-back. Wait until the end of the allowed period to respond. The seller will worry that you’re going to walk, and be grateful (and more pliable).

If the negotiations fall through, give it up. Take a few days or weeks off, then go in again. You may be surprised at the result.

Finally, just a day after the steerage section tried to take over the blog’s bridge, Canada’s biggest bank published this message in my defence (not that I need):

Canadian homebuyers are seeing a “long overdue” improvement in housing affordability, according to RBC, but the bank is warning Toronto residents to enjoy it while it lasts…the retreat from “dizzying heights earlier last year” will be brief.

“It would be tempting to view the fourth quarter’s affordability improvement in Canada as the start of a new, friendlier trend for homebuyers,” RBC Economic Research wrote. “But this is unlikely to be the case for a few key reasons. First, we expect the reprieve in the Toronto area to be short-lived. We believe that Toronto prices will bottom out sometime this spring. Second, we expect interest rates to rise further.”

There. Now you can hate the bank instead. Much more satisfying. Because I don’t care.

293 comments ↓

If a tree falls in the forest but there is no one there to hear it does it still make a sound ?
If a correction occurs in the housing market that does not include Toronto or Vancouver is it still a correction ?

Yesterday was a realization day for me actually I was a person who judged people by their looks and how they live their lifestyle and I really regret it because the person whom I always misunderstood and thought that useless or cheap turned out to be the most kindest and loving ,that person has always behaved with me in a very good manner but I always criticized him and teased him and I never tried to understand that person

-Be careful for higher rates
-Be careful of your hormones/mother-in-law/BIL/friend’s/media/Al Sinclair’s advice
-Be careful for B-20
-Be careful for the stress test
-Be careful not to listen to the FIRE industry
-Be careful of national debt loads
-Be careful of what happened during the last downturn in the GTA

..and tons of chiding of realtors, or any bull who may have come on here with a contrarian view.

Meanwhile house prices have increased relentlessly the whole time.

So house prices went from 1.3 million to 1.25 million in the crap part of town over a few months. BUY everyone (if you can afford it of course).

MF

All of those cautions were predictive of this week’s headlines. – Garth

“It would be tempting to view the fourth quarter’s affordability improvement in Canada as the start of a new, friendlier trend for homebuyers,” RBC Economic Research wrote. “But this is unlikely to be the case for a few key reasons. First, we expect the reprieve in the Toronto area to be short-lived. We believe that Toronto prices will bottom out sometime this spring. Second, we expect interest rates to rise further…

===========

So one of our key banks acknowledges that rates will rise, but that will not help support the trend of softening prices? So apparently there is no correlation between the era of cheap interest rates and rising prices; and thus no correlation between rising interest rates and price reductions.

If that is the case, then all pundits blaming low interest interest rates as the cause of the housing bubble are clearly wrong. I guess we have to look at other variables that people do not want to discuss or acknowledge.

The problem is that the kids think they can buy a house and have it delivered in a great big smiling box in 2 days. They have no idea that it takes months to find and close on a house… GT is saying start looking now, start wheeling and dealing, otherwise you’ll be left behind again.

“Canadian homebuyers are seeing a “long overdue” improvement in housing affordability, according to RBC, but the bank is warning Toronto residents to enjoy it while it lasts…the retreat from “dizzying heights earlier last year” will be brief.”

I can’t speak for the rest of Canada, but those of us that live in the Lower Mainland always knew prices would only go up and continue to do so. Those that came here wishing, hoping and praying that the big decline would hit the Lower Mainland just wasted 5+ years of windfall gains. the Lower Mainland is the most desirable place in Canada for those migrating here (not necessarily Canadians themselves, but certainly for newcomers to Canada). It will continue to go up from here… supply and demand will see to this.

It really makes me sick to listen to these whiners.
If the house price went up, they would be bragging to all their friends.
Man up, take the loss and learn.
I’ve lost $400,000 on one house deal in BC and never whined once.
Definitly, the new buyers can’t take the heat, and should not be in the housing market.
Life is a crap shoot!!!!!

House prices are still ridiculous overpriced in many Canadian markets and I would question whether future generations will be able to afford them. I’m a boomer renter who will become an expat in a few years and but a beachfront property at a fraction of what buyers in the big smoke pay for a box.

I can’t pass judgement on the rest of Canada’s real estate market but being in Vancouver I expect a US style collapse. There are several factors at play.

1. Some estimates put residential real estate at 40% of the lower mainlands GDP. Expect a huge unemployment problem with people having no choice but to sell. Easy to make the argument of 25% unemployment. One positive…..all those beautiful Audios will be a bargain.

2. People in Vancouver on average spend 8% more than they make. This is taken out on home equity loans. Bankers will turn off the money taps as the market declines. People have less to spend. More employees laid off.

3. There are no good jobs in Vancouver. People forget we were a have not province in the mid to late 90’s. We got transfer payments from Ottawa because we were a financial basket case. When real estate starting appreciating the party began. If you look at our major industries there are less jobs relative to the population than the 90’s. We have badly neglected our important industries and have been snorting lines of the mind altering real estate market.

4. I know so many people who own a house and leveraged it for 3,4 or more condos. They are leveraged to the max because REAL ESTATE ALWAYS GOES UP. Everybody is a speculator. They will all run for the exits to to avoid financial ruin.

5. Vancouver has a very low average household income. Ultimately the wages in a city have to reflect the value of real estate.

6. So many people have given up on the city and there is a mass exodus going on as I speak. People can’t afford to buy or even rent.

I could go on and on but looking at things in the trenches I would be extremely surprised if we don’t see a 70% decline. Even at 70% we will still be considered extremely expensive by North American standards.

This quote from the article sums up the psychology of those buyers nicely:

“It’s not something (the government) could have forgotten about. It’s something they dismissed,” said Khan. “There’s some level of accountability with everybody and nobody’s stepping up.”

Here we have Khan refusing to acknowledge that it is 100% his own fault that he decided to risk buying a 2nd house before selling (or at least have a solid offer on) his existing house. I think it’s time for people like Khan to “step up” and take responsibility for their own actions.

I forgot the most important thing about Vancouver….our number one industry is also seriously collapsing. Weed production was bigger than forestry, mining and fishing combined. With legalization in Us states and in Canada it is being decimated.

I cannot believe when a 10 year bull run “ends” it does all the unravelling in just a couple of months… especially when assets are supposed to revert to the mean, there are significant legislative changes and rates are increasing.

I won’t be ready to buy until late next year anyway… so time will tell either way.

Struggling to raise a family Van or TO is unhealthy unless you are rich. Flip these places the bird and move on. Lots of cool little towns and cities to live in BC or Ont not to mention the east coast. I’m from Van but live in Ontario now and would not move back there. Van used to be a cool city many years ago but it has totally lost its vibe. Good luck to all you trying to make in these places as the average Joe will need a 70% correction but that is just wishful thinking.

if only 1% of your pathetic blog readers leave or read the comments section -may I suggest the 99% of us left would most likely not miss demise of the section. The daily blog educates and entertains us, and Garth, life is too short for the daily hassle.

“This is simply because it’s now evident (to this blog, anyway) conditions have changed. The Mills are getting unexpectedly aggressive about real estate (look at those ridiculous condo sales), and the economy is about to move forward.”
——–

If there are two things that were preached day-in-day-out on this blog they were that: Mills are crazy house honey and the economy can be expected to move forward. I’m surprised to see these to fundamental characteristics of the market, which were routinely mentioned as reasons not to buy real estate, described as unexpected changes that make it a good idea to buy real estate.

I come here for the wit (Garth is a master) and the time wasting (the comments section can’t be beat). I can, however, recognize that, if I had based my housing choices based on the free advice given here, I would probably be unhappy this week.

Sorry Garth I cant see these “reduced prices” attracting locals in large numbers to sign up for a massive mortgage.
Most moisters I know are still nesting in Mommas basement surviving on video games and free rent.

I agree all real estate is local but it is ridiculous to state prices have dropped much or at all in most major markets. If one bought anytime in Feb or March 2017 – you might be down slightly. If you bought any other time in the last 118/120 months in the last decade you are still up or flat. If you bought in 2017 – hopefully you don’t have to sell because generally you don’t make money flipping in 1 year anyway without serious reno’s.

Thank heaven, as a former parliamentarian, you believe in healthy debate on this blog, because what RBC is saying is a crock of shit and they are trying to defend their extremely vulnerable mortgage book.

Conditions at our housing market top were not mimicking the US at their top…ours were, and are, far worse. Ironically, it was the same RBC that pointed that out. All the relevant metrics like median income to median house price were WAY worse here than in the US in 2006.

Our metrics are worse, and our decline will be worse. Period.

Calling up a graph of Home Capital stock price tells you all you need to know.

There are no ‘pockets of safety’ in the GTA. Real estate moves in long waves, and this bear will last for years.

Keep renting in the GTA!

Oh and for you UltraBlues, I’ll be at Kinga Surma’s office opening on Saturday noon at Richview Plaza in Etobicoke Centre. Go Ontario PCs!!

This quote from the article sums up the psychology of those buyers nicely:

“It’s not something (the government) could have forgotten about. It’s something they dismissed,” said Khan. “There’s some level of accountability with everybody and nobody’s stepping up.”

Here we have Khan refusing to acknowledge that it is 100% his own fault that he decided to risk buying a 2nd house before selling (or at least have a solid offer on) his existing house. I think it’s time for people like Khan to “step up” and take responsibility for their own actions.

==========================

You think a notion that he was misled by government/lending institution/real estate cartels won’t stand out in court?

#31 crowdedelevatorfartz on 04.05.18 at 6:54 pm
Sorry Garth I cant see these “reduced prices” attracting locals in large numbers to sign up for a massive mortgage.
Most moisters I know are still nesting in Mommas basement surviving on video games and free rent.

=========================

THEY are looking for greater fools not realizing that there is NONE left.

Don’t play your hand with your realtor. If you tell the agent you really really like the house, expect that to get back to the sellers agent. Sad but true, you need to game your own realtor. Keep excitement and your best price between you and the wife.

Sad but true and one of the reasons RE ran out of control. My dads place sold above ask with 1 offer! How do you think that happens, its a realtor encouraging their buyer to go big. Unless you know them personally, they do not represent you they are looking for a quick sale as much as the sellers agent.

I’ve been a fan of this blog for many years. Garth you probably don’t remember me but in early 2015 I came to see you to open an investment account with you. At the time I had 60k saved you told me come back when I have some more money saved. You told me to open an online investment account and you gave me a list of etfs to invest in. By 2016 I had a little over 100k saved but by then my wife was about to go on maturity leave and you advised me to stay invested but couldn’t take me on as a client because my expenses were going to go up and I might need a little more cash available with the baby coming and my wife not working. I now have 250k in balanced portfolio plus a pension of 300k. If not for you I would never have gotten my shit together.

I too was upset with the last few posts. I always thought we would have a u.s style meltdown but I had an epiphany today, all these years I’ve been waiting for a crash which would devastate families, young children like my own just so I can buy a cheap home. There’s something really wrong with that. I now realize that all you’ve ever preached was balance and avoiding risk. If this is it I want to thank you for everything you have taught me I’ve become a more responsible person because of this blog

You guys were right too, that Mattamy Fairness website was pure comedic genius. It was like Robin Williams and Andy Kaufman were reincarnated on the same day.

I bought at the top of a 21 year bull market and I can’t believe no one is HELPING ME!!! Peeing my pants.

My favourite was the line about ‘all my finances are on my phone and I know exactly what’s going on here’. True, he saved $10 a month on internet but bought a 1.2m house with 6-1 leverage. In tears here!!! So funny

If rates are going up, and the stress test sticks around, house prices are going down. Houses are and always have been primarily bought with mortgages. What people can buy is directly linked to what they can be lent.

The bank can say whatever it wants but that doesnt mean they are always right, and im sure history would support that.

Will prices tank? No. Will they still decline? Yes. Prices are still up bigly from the last 4-5 years. People no longer think that real estate is a no brainer. People are also having a hard time buying now more than ever. There was just a study published that sentiment is the #1 factor when it comes to crashes, not fundamentals. You dont think that has changed?

A few months ago this blog was saying shit will hit the fan. But nothing has changed since then. Prices declined last spring/summer…. nothing really since then. So why is this blog doing a 180? kind of odd. Maybe Garth is trying to hang it up and end this blog and call it a win?

Bank economist’s and most (not all) Bay Street (and Wall Street) analysts are masterful “confidence spinners”. After all these hedge-fund seers and wealth-custodians make their living off growth and returns. They dread uncertainty, volatility and black swan events.

They play up narratives that drive markets higher and minimize (or blatantly disregard) any narrative that threatens market valuations.

It should come as no surprise. After all “fisherman want to fish” regardless of what is happening to fish stocks.

Oddly enough, this blog has generally avoided “confidence spinning” and settled for most part, on peddling sound financial advice and some controversial predictions on Canadian real estate.

Sell your house first and find a place to rent while you search for the perfect home. Move everthing into storage, added benefit is your home will show very well without all the stuff that makes a home cozy, but also turns off buyers. Thats what my wife and I did and it took all the pressure off having to find a place, or sell our place, under duress.

Me thinks Mr. G knows something we don’t, and he is not ‘allowed’ by tptb to discuss it.

What is it Mr. G? QE for banks from the feds? Relief for ‘troubled’ homeowers with negative equity by tax payers? Free money for first time buyers? More regulations to limit supply? Backroom deals to foreign ‘investors’? Additional funding for media RE pumpers going full retard? Loonie about to tank? NO MOAR RATE HIKES? What is it?

Talked to a realtor friend this week. Toronto condos: very few can afford their three-digit per square foot cost + two land transfer taxed + realtor fees + lawyer costs on the close or change.

This leaves a market of the 20% – this blog should reform to their needs:
Downsizers seling to upsizers – like Boomers offloading onto coules each with lots of built up equity from their condos.
(Two bedders doubled in past five years)
– The true 10% top income earners.
– Bank of Boomer Ma & Pa Trust clients.
– Insane Mattamay Speculators.

The 80% of us are content renters or owners with balanced ports.

There’s no way a couple or single earning ~150,000 annually should even be looking at Toronto slanty semi low ender, which runs 3/4 of a million dollars. Nor at a 905 wasteland townhome at this same rate.
Coming are “Carbon taxes” and mandatory perhaps yearly “Energy Audits” . Fix up or you cannot sell without mark of the beast.

Declines here in YVR are all at the high end where foreign/specker money was a bigger component. For anything “affordable” (1mil and under) there has been no visible decline in prices yet. Maybe DoM and volume have degraded, but we’ll have to wait and see if a meaningful price decline ever materializes. If not within 12 months I will concede and adopt the view that the Lower Mainland real estate market is truly infallible.. save perhaps only to a much larger systemic economic shock.

Do you not expect house prices to resort to their long term mean (ie. 5% YOY increase over the past several decades)? The current average in the big smoke is still much higher that what they should be.

“This is not to say house values are about to swell. They’re not – for a while. And BC has not yet even felt the ding of the Dippers. But in many other markets, and hoods, waiting for a massive collapse is futile.”

Well said Garth. Overall home values will stall to slowly decline over the short term. But over the medium to long term the deeply embedded cultism of home ownership lust in this country will continue to fuel demand that will push prices higher and higher. I don’t ever see a time going forward where home prices will collapse to being affordable ever again. Home prices in Canada have been pushed into the stratosphere and that is where they are going to stay for a variety of factors with only minor local fluctuations in prices along the way. When people shop for homes now it’s not “price” that’s important anymore it’s “payment”. If you can afford the payment ………….. who cares what the price is! This is how almost all major purchases are done now. It’s what an entire generation bases their buying decisions on. If you want a home in Canada you will have to take on huge debt to get it. It will barely ever get any more affordable and will only cost more and more as the decades pass by.

#3 Whatcha Minnie on 04.05.18 at 6:10 pm
Yesterday was a realization day for me actually I was a person who judged people by their looks and how they live their lifestyle and I really regret it because the person whom I always misunderstood and thought that useless or cheap turned out to be the most kindest and loving ,that person has always behaved with me in a very good manner but I always criticized him and teased him and I never tried to understand that person.
………………………

Sometimes I am naughty and I should be spanked. Do you have leopard skin pants ?

RE:#38 Stan Brooks on 04.05.18 at 6:56 pm
You think a notion that he was misled by government/lending institution/real estate cartels won’t stand out in court?

==========================

Nope. It’s not like it was a secret that the government was looking at cooling the RE market at the time Khan bought his prebuild. It’s not like it isn’t common knowledge that an association of commissioned salesmen doesn’t have your best interests at heart. Etc. I doubt that any court would rule in Khan’s favour.

#48 Looney Baloney on 04.05.18 at 7:09 pm
Me thinks Mr. G knows something we don’t, and he is not ‘allowed’ by tptb to discuss it.

What is it Mr. G? QE for banks from the feds? Relief for ‘troubled’ homeowers with negative equity by tax payers? Free money for first time buyers? More regulations to limit supply? Backroom deals to foreign ‘investors’? Additional funding for media RE pumpers going full retard? Loonie about to tank? NO MOAR RATE HIKES? What is it?
…………………

Seriously?? OMG! So the fat lady sings, were pooched! Just read China has BC MLS and they can order houses like they’re buying Amazon products! How is this allowed to continue. If I hear one more smug suggestion to move elsewhere I will scream! I doubt any of these people are caring for elderly family members, or would ever consider it. Society is dead, greed has won! Congrats Home Owners!

That’s not happening. Get used to it. So when a 30% price drop comes along (swaths of the 905) or a 14% trimming of values (Toronto), or stagnation (Calgary, Ottawa, Halifax), maybe you should take notice, and take action

……….

incomes have largely been flat. To buy a house for $850,000 cause its on sale from $1,000,000?

I get it, he said prices would drop when they were 50 percent lower than they are today.

I get it, you’re upset he’s saying now may be a good time to buy even though prices were still cheaper 3 years ago.

But the RE market has changed. The economy is changing. If you want to capitalize on a 30 percent reduction house prices from the PEAK of it’s market, now is the time.

If you sit on the sidelines now in hopes of a bigger crash, the ship will sale without you.

Don’t buy if you don’t have the money. Rent.

Take the money you would have put toward a down payment and put it in a balanced diversified portfolio and rent for ever. Some of the money you make on the investments might even cover a few months rent for you.

Hi everyone I’ve been reading here since 2009 off and on but mostly on, since I found a printed version of a post in the men’s washroom at work – and first want to thank Garth for his daily market insights and good humor, I can honestly say I’ve learned a lot.

Now that the sucking up is out of the way, I to am dismayed by the sudden turn in sentiment and agree with the above poster – 300% up and 14% down and that is it?! Because a bank said something about bottoming, and some mills survey said they want to buy??

This doesn’t add up to me. What about the gargantuan mortgage debt and rising rates?? That alone should trump any inflation and coming economic growth, no?

If rates rise a piddly 3% from 2-2.5% wouldn’t that alone suck 50% credit out of the gas bag market? Basic economics would say if the avg Joe bought in the kingdom of 416 for 900K at 2.5%, and another Joe wanted to buy at rates of 5%, say in a few years, wouldn’t that generally bring only available credit of about 450K, meaning you can’t just bid 900k anymore?
Assuming all other variables are mostly the same.

30% decline sounds good, but not when things have run up much more than anytime in past history.

But not much makes sense in the investing world now a days – best to stick close to God.

I told you so! By the year 2085, house prices in Toronto will skyrocket by 1,000% or more! What you pay $1MM for now in Toronto will become $1 BILLION dollars by 2025 in TODAY’S DOLLARS (ignoring hyperinflation).
Our global population is increasing by 500 MILLION every year, and this means that real estate will become very scarce. Think Hong Cong or Dakka. House prices will not remain this low for now!!!!

Garth, I love the picture. It shows a “bear” coming in for the kill. Appropriate.

Listen Blog Dawgs, follow the actions (pics) not the words. If Garth has been gently “asked” by the PTB to tone it down in the face of a possible “perfect storm” then he is doing just that with his words but showing you something different in the pictures.

He is “deferring” to the PTB on one hand but showing us the eventual “death” of the housing market and unfortunately the economy on the other.

“…The only way such an event could occur would be if conditions here mimicked those in the States when that market crashed. A serious recession. Double-digit unemployment. No available credit. And a housing market where people were too pooched or terrified to buy…”-Garth
_ _ _
Well, except those “conditions” were all the result of the housing meltdown, not the cause. The main culprit being securitized garbage mortgages.

Although of course, we all know Canadian banks etc operate to a higher standard etc etc. Oh wait a minute, maybe they don’t:
Canada’s “Special” Accounting System
“…You’ve probably heard Canadian banks have some of the lowest impaired mortgage rates in the world? That’s because we used our own special method to account for them. In Canada, loans securitized by a private insurance company, aren’t considered impaired until 180 days of non-payment. Loans securitized by the government backed Canada Housing and Mortgage Corporation (CMHC), aren’t considered impaired until 365 days of non-payment. That’s a lot of time to screw up on payments, list your home, and even make a profit during a bull market. A large part of why impaired mortgage dollar volumes appear lower than they are.
Under IFRS-9, that changes. All loans, except for credit cards, are automatically considered impaired after 90 days of non-payment. That includes CMHC’s obscenely long 365 day window, for accounting purposes at least. This is already making dramatic changes to the numbers banks are reporting…”

*Rates wont go up enough to make enough difference
*Globalization
*Steady flow of 2nd world immigrants who will take the risk on RE
*Capital flight
*Lame Canadian climate limiting choice what cities people want to live

I cannot imagine just how many hours you have consumed in writing this blog and reading all of the comments over this past 10 years. I know that for myself having read every post since the fall of 08 that it would be hundreds of hours. It has been a daily part of my life in all those years and just want to say thanks for all your efforts and the knowledge that I have accumulated both from your writings and those of the blog dogs. You are to be commended for all that you have done.

#55 Terry on 04.05.18 at 7:22 pm
“This is not to say house values are about to swell. They’re not – for a while. And BC has not yet even felt the ding of the Dippers. But in many other markets, and hoods, waiting for a massive collapse is futile.”

Well said Garth. Overall home values will stall to slowly decline over the short term. But over the medium to long term the deeply embedded cultism of home ownership lust in this country will continue to fuel demand that will push prices higher and higher. I don’t ever see a time going forward where home prices will collapse to being affordable ever again. Home prices in Canada have been pushed into the stratosphere and that is where they are going to stay for a variety of factors with only minor local fluctuations in prices along the way. When people shop for homes now it’s not “price” that’s important anymore it’s “payment”. If you can afford the payment ………….. who cares what the price is! This is how almost all major purchases are done now. It’s what an entire generation bases their buying decisions on. If you want a home in Canada you will have to take on huge debt to get it. It will barely ever get any more affordable and will only cost more and more as the decades pass by.

Caveat Emptor.
———————————————————–
pretty stupid comment – prices are directly related monthly payment. Then rising rates will smolder the amount of the so called payment. See my above post for further clarification.

RECENT CREDIT EVENTS.
A history of late mortgage payments, credit card delinquencies, tax arrears, long forgotten spousal support payments, etc. are now quietly referred to as , ” recent credit events”,
I suspect the heavily indebted are now ordering take out food as every night is a long one. I suspect they rack their brains as they try to figure out a solution as to how to stay solvent without actually making any meaningful life style changes. You can trust me as the teller of truth in the land of gypsies, tramps and thieves.

I think many readers have a legitimate beef with the latest posts. For the past years, this Blog has advocated avoiding the real-estate like the plague. Now, after a small correction (and yes it is small compared with the price increases of the past 2-3 years) suddenly housing is cool. Many who took you seriously in 2010 probably feel betrayed that after they “missed” on a 150% real estate increase they are advised now to jump into the market because the prices went down by as much as 30% in some select area. This advice doesn’t make sense for a lot of people, and for a good reason.
Some might ask themselves if cheerleading of the mythical “soft landing” is genuine or just a result of becoming a “leading North American” wealth management firm. The type of firm that likes stability and steady returns above else.

No idea if the Canadian real-estate market will collapse or jump to new heights in a few months. However, I’m somewhat confident it won’t be what a plethora of economists and wealth managers predict. Maybe the inflation will increase, jobs growth will continue to be robust, and economy prosper. However, we might also have NAFTA unraveling, a trade war on a global scale and a flight of capital in the face of an apparent anti-business environment in Canada.

In the face of such possible risks, advising people to jump into real estate now seems just being contrarian for the sake of being contrarian, at best, and being plain reckless and wrong, at worst.
Cheers.

Ill-written comment. My advice was not to avoid real estate, but to buy within your means when you can afford, understanding a correction was coming. For many, renting is the best option, as I have shown mathematically over and again. And no where am I saying ‘jump in’ to a house. Instead, my view is that the correction in some areas is worth mining. Extremism does not make for good investing. – Garth

#70 Your Local Realtor on 04.05.18 at 8:04 pm
I told you so! By the year 2085, house prices in Toronto will skyrocket by 1,000% or more! What you pay $1MM for now in Toronto will become $1 BILLION dollars by 2025 in TODAY’S DOLLARS (ignoring hyperinflation).
Our global population is increasing by 500 MILLION every year, and this means that real estate will become very scarce. Think Hong Cong or Dakka. House prices will not remain this low for now!!!!
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lol interest rates have been at 5000 year lows for a decade and the trend is reversing to the upside.

We have over a million dollars in liquid assets and are still renting in the 905 area. No way in hell we are buying now! We believe prices will continue collapsing further this year and probably 2019 as well. I love Garth’s blog but I disagree completely with the last 3 posts. Makes no sense.
1. Moms bank is going out of business- Mom now knows prices are no longer rising or even stable.
2. Rates are rising-> home prices decreasing- wasn’t that one of your famous lessons Garth?!
3. What is this bullshit with RBC? Common!
4. Crazy HELOCS- remember that?
5. Over stretched home owners- no need to elaborate on that either.
6. Boomers are finally realizing there is no more reason for them to delay cashing out of their home and move on to retirement- prices no longer going up. Their detacheds will finally hit the market.
7. Salaries still barely going up….. wayyyy to go before it catches up with home prices to make any sense
8. Record breaking pre construction sales from 2016-2018 are due to close this year and in 2019- good luck with all that new supply hitting a dead market.
9. We did not even start to see the full effect of stress test. This is why May and going further will be very interesting. Let’s see….
10. Chinese money is gone- I know u don’t agree they had anything to do with anything Garth, but yes they did! Big time. (Nothing to do with racism. Just facts)
11. Garth’s advice to take advantage of desperate sellers is smart- but if u think sellers are desperate now, Welllll they are about to get way more desperate going forward- don’t hate on me for that comment, I’m a good person, it’s just business. Either take advantage or suck it up!
12. Psychology is different now- people are finally waking up and leaving their own mental bubble to a new reality. Fear takes over. People loose confidence. That alone has a huge impact on the market.

Theres more stuff of course but anyways..

If u want to buy now, go ahead but at your own risk. I’m still out until further notice.

Have you driven on the Trans Canada Highway in Vancouver any time between 6am and 6pm any day of the week?

Gridlock.

I was driving back into the Lower Mainland from the interior 2 weeks ago on a Tuesday afternoon.
4pm. Abbottsford.
The traffic on the 2 lane divided highway came to a complete stop…….for 15 minutes…….no movement.

I turned on the radio to the traffic news.
Nothing for the TCH heading west, no accidents, no stalls, nothing.
For the next hour and a half we crawled for 15 kms……

I asked a friend who lives in Agassiz ,” WTF?”
“Its like that every day. They’ve built thousands of houses in hundreds of subdivisions without widening the Trans Canada Highway…….”
2 lanes, each way, for a metropolis of what? 2.5 million?

I mostly agree with Garth today, a collapse in pricing is unlikely. House prices are “sticky”. The long term bottom is somewhere around what it costs to build new housing, but the closer you get to downtown the more you pay for location, until eventually the “value” of the structure is nearly irrelevant.

Looking at Alberta, the economy has been in a near disaster state for over 4 years now because the price of our 2 biggest exports, oil and natural gas, is in the toilet. We don’t even get $60/bbl as is quoted all the time because that is a US price. After you account for something called “netback” (basically, transportation), it’s more like $30/bbl at Edmonton. Nobody is making any money at that price.

But yet house prices in Edmonton have only fallen modestly and in Calgary it’s been pretty flat. It’s been years now that it’s been pretty flat, but that’s what it’s been, no big crash.

There are 2 ways for an overheated market to get back to the trend, it can crash, or it can just trade sideways until the trend catches up. When I use my highly honed technical analysis skills on this chart from Brian Ripley:

I conclude that Toronto could drop another 15-20%, but it could also just start trading sideways like Calgary and Edmonton have been doing since 2008 (and will continue to do so for some time, but the fear of a drop of more than 10% in those markets has probably already been worked off).

Vancouver, on the other hand, is a different story. That line could drop $400,000, or 26%, just to get back to trend. More likely it’ll drop half way like Toronto did and then trade sideways, but I wouldn’t sound the “all clear” in Vancouver just yet. Especially with all the NDP shenanigans.

Also I don’t understand why Vancouver house prices should be any higher than Toronto. I can understand Toronto being priced higher than Calgary because in Calgary a long commute to work is 45 minutes so we can always just build more houses, a lot more houses (Pie*R^2) and they won’t be all that far away from downtown, whereas Toronto is a much larger city.But Vancouver? The average income isn’t high enough to sustain those prices. And all the money is in Toronto. With the nature of work becoming more and more mobile, why wouldn’t young people, who increasingly don’t need anything more than a laptop, an external monitor, and a high speed internet connection to work just move on out of Vancouver to someplace they can afford to live? If Calgary, where housing costs nearly 1/3 and the commutes are so reasonable, is too quaint for you, even Toronto is cheaper and much closer to the center of the Universe, NYC.

So I would say that buying isn’t totally a bad idea in most of Canada, maybe a bit risky still in Toronto, but I wouldn’t dare in Vancouver. But that’s ok, Garth’s advice that if you buy, make sure you can afford it already means nobody can buy in Vancouver, only a select few in Toronto, and actually not that many in Calgary yet either. The rest of the country is probably ok.

Such media coverage is a serious issue, and a market-maker. Real estate runs on confidence, hormones and cheap money.

—————————-

The media is trying to cover their butts so when things start to unravel e.g. as more people face stress tests at renewal and the thousands of units bought by speculators under the assumptions: rates would stay at 2%, home prices would continue to increase 10% a year and buyers would always be plentiful and pay full asking; have to close on the new dwellings and find out they can’t get enough money from lenders (including private lenders) to pay for their purchases in a rising interest rate environment.

The media can pretend, they warned their audience over and over again about the deterioration in the housing market because they cared about their well-being and wanted to keep the public informed.

This is no different than the real estate agents that provided updates on social media or write columns in newspapers about the hot Toronto housing market, who now state real estate is a long-term investment meant to be bought with the intention of owning the property for 5, 10 or 15 years while paying down the mortgage debt before seeing a return on the investment in a stable housing market.

The US media did the same thing when their financial and housing markets started to go downhill, ‘we warned you!’ they said.

Lastly, out of 3007 blog posts you have had maybe 10-20 posts where the entire comment section disagreed with your points of view. Many politicians in Canada would be envious of such high approval ratings.

#19 VanMan on 04.05.18 at 6:39 pm
I can’t speak for the rest of Canada, but those of us that live in the Lower Mainland always knew prices would only go up and continue to do so. Those that came here wishing, hoping and praying that the big decline would hit the Lower Mainland just wasted 5+ years of windfall gains. the Lower Mainland is the most desirable place in Canada for those migrating here (not necessarily Canadians themselves, but certainly for newcomers to Canada). It will continue to go up from here… supply and demand will see to this.
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Isn’t that area susceptible to earth quakes? One tsunami and it becomes just the mainland.

I don’t understand how people can expect prices to bottom out in spring and then continue to rise if the expectation is also that the cost of money is about to steadily march upward.

If the cost of money steadily increases, then the cost of assets purchased with high leverage (i.e. tied tightly to the cost of money) should steadily (but not drastically or suddenly in big jumps like we’ve just seen) decrease, no?

Don’t take the laptop when on vacation as that is a distraction. When we travelled across Canada in 2008 the first three days we were hoping the animals were fed then on the fourth day we said what animals (as a joke). Enjoy and take as long as possible.

Have to agree with #37 Ian on the stance that the RBC is only defending themselves and making it like business as usual. And as #16 ben says about “prices are set by credit affordability and higher rates mean lower prices.”

But #64 Bekki mentions that China through BC MLS orders a house like buying through Amazon. I wonder if T2 mentioned anything about this while he was in Victoria trying to sell his “world-class response?” He missed his mark on both issues.

And Stan Brooks on a recession coming and possible depression (my quick notes get scattered). Maybe that is what the banks are worried about. Oh, I think so too but without the crazy housing economy we would have gone into one long ago.

Who has a working job; who has money; who has debt; and are people having kids/having families; buying with money or with credit.

The houses are too expensive, the rents high, food goes up then open up the newspaper and more homeless.

What is so good about rising home prices? It only increases housing cost and shrinks disposable income. Declining house price must be a good thing and I don’t understand why so many people are so concerned about it.

I’ve been following your blog for the past year and a half and have agreed wholeheartedly with your views on real estate until the past several months. Sometimes you’ve changed your stance back and forth on a few of your views which creates a problem for me. I thought maybe it was done just to stir the pot to get everyone posting lol. One thing you’ve tried to drill into readers is that low interest rates equal high real estate prices and raising interest rates brings real estate prices down. Now you’re recommending that people who “can” should buy now but what about the two BOC rate increases that you and others have said will be coming. Wouldn’t it be more prudent to wait for the interest rate hikes? Also this is the spring market which historically is always the busiest (people get cabin fever and run out and buy something they shouldn’t) so what kind of advantage can you have jumping into a spring market?

#38 Stan Brooks on 04.05.18 at 6:56 pm
#14 kommykim on 04.05.18 at 6:49 pm
RE:#4 FATLADY on 04.05.18 at 6:15 pmWe need to identify the responsible and put them in jail. Period.
****************************
So after all of the bitching about houses not being affordable some measures were taken to make them affordable, and someone should go to jail for it?
What’s the crime exactly?

If prices had continued to rise, and this Khan dude came out 200K ahead instead of 200K down, should he go to jail? Or give that money to the developer? Or you?

The guy took a big risk and it didn’t pay off. It’s like taking out a massive payday loan, spending it all, and then getting laid off with no paycheck coming. It totally sucks, but that’s the risk when you commit to buying something with money you don’t have.
He has no one to blame but himself.

#78 Big Lebowski on 04.05.18 at 8:12 pm
I think many readers have a legitimate beef with the latest posts. For the past years, this Blog has advocated avoiding the real-estate like the plague. Now, after a small correction (and yes it is small compared with the price increases of the past 2-3 years) suddenly housing is cool. Many who took you seriously in 2010 probably feel betrayed that after they “missed” on a 150% real estate increase they are advised now to jump into the market because the prices went down by as much as 30% in some select area. This advice doesn’t make sense for a lot of people, and for a good reason.
Some might ask themselves if cheerleading of the mythical “soft landing” is genuine or just a result of becoming a “leading North American” wealth management firm. The type of firm that likes stability and steady returns above else.

No idea if the Canadian real-estate market will collapse or jump to new heights in a few months. However, I’m somewhat confident it won’t be what a plethora of economists and wealth managers predict. Maybe the inflation will increase, jobs growth will continue to be robust, and economy prosper. However, we might also have NAFTA unraveling, a trade war on a global scale and a flight of capital in the face of an apparent anti-business environment in Canada.

In the face of such possible risks, advising people to jump into real estate now seems just being contrarian for the sake of being contrarian, at best, and being plain reckless and wrong, at worst.
Cheers.

Ill-written comment. My advice was not to avoid real estate, but to buy within your means when you can afford, understanding a correction was coming. For many, renting is the best option, as I have shown mathematically over and again. And no where am I saying ‘jump in’ to a house. Instead, my view is that the correction in some areas is worth mining. Extremism does not make for good investing. – Garth
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Maybe the Illuminati have taken Garth hostage in the basement with a gun to his head while Bandit has been tied up. Just thinking out loud here.

The greaterfool blog is ending? Did I misread? There was a recent full moon Garth. The crazy comes out to play. Its easy to lay blame when people have regrets, people interpret your words how they want to hear it. You can search anything on google and find an article that agrees with you. No gun pointing at your heads, we are responsible for our own actions people. GROW UP!,
Rant over;)

1) magically run a 1.3t deficit, on the back of the already existing 21t of dog poo they have already accumulated

2) have a new Republican Fed Chair who may…or may not…decide to continue with Yellen’s view of unloading 400b per year magically back into the market

…when the foreign creditors are facing a USD that is at a 3.5 year low, going much lower, and China is public already admitting that just maybe it wasn’t such a good plan to accumulate 1t of the US’s dog poo…

…Without either the USD collapsing (my bet), or US bonds defaulting.

The US has been living large on a mirage of dog poo / trade deficits that started in 1975, and because of their reserve currency status no one cared.

When the U.S. had their collapse in house prices, people at the beginning said that prices would soon bounce back, but the melt continued and continued!

Garth has been warning us for years about house prices retreating, but a 14% house price correction in the GTA, simply takes us back to late 2016, it is nothing!

House prices need and will go back to a mean price and knocking 40-50% off probably only takes us back to 2014, which would make sense. Affordability for average Canadians in the GTA and Vancouver is not there, so fundamentals will continue to send these prices down for the next few years.

Garth is probably wrong as is RBC…it’s not like they haven’t been wrong before.

Sit on the sidelines folks and watch this melt over the next few years!

I can also understand why so many are upset and feel somewhat betrayed by the recent posts. Since roughly 10 years ago, this blog has been preaching about the Canadian housing bubble, while prices have increased 2-3 times (ballpark estimate), depending on location. Even with up to 30% reduction in prices, it is still 40 to 110% higher than when the blog started preaching about the housing bubble. For a house, that’s a lot of money and a significant missed opportunity for many.

Don’t get me wrong, I also feel that one should probably consider buying with a 30% reduction from the peak, but I can understand those who feel betrayed (or perhaps misinformed) because they would be better off if they had never followed the advice from this blog and just bought. It is just the recent blog posts have turned the tide too sudden (from it is a bubble, to there would be a slow melt, to it is time to buy).

To the blog’s defense (not that you need it or care), it has provided excellent non-housing related financial investment advice, and if one had followed that and borrowed to the max to invest, the gain would have been at least equal or more. However, fact is, people in general are more willing to borrow for a house than borrowing to invest in the stock market or etc…

I guess it’s time to buy in Vancouver. It’s not going down according to Garth. At least not that much anyway. Better investment than all the $$$ I’ve lost in the stock market lately. I wish you could be consistent. I’m being spun in circles.

FYI, no price drops anywhere in BC. Still going up.

I said Vancouver has not yet started to correct seriously to the NDP. How could you miss that? The level of sloppiness among commenters tonight is breathtaking. – Garth

Ok Garth I got ya. Been a reader for about a year and have about five comments under my belt. Loved the free advice over the year. You are for sure a very talented writer I will certainly grant you that. You have kept this blog going as a means of therapy, an educational tool and mostly great entertainment. Up until now everything was theory and we were too happy to endulge in what ifs. Now the rubber is meeting the road! You may be right and this is the bottom for the foreseeable future. We may just linger around and go up from here but just maybe it goes the other way and we see a Canadian tragedy of monstrous proportions. What I do know is that you are now taking the training wheels off your disciples. I hope everybody is ready for the ride whatever way it might go.

As someone not in the market for detached (even at 30% off it would be financial suicide) I have to say I’m pretty disappointed by the overall change in tune. Whether it’s intentional or not, Garth, it’s there, but as you say who cares. You’re certainly not obligated to.

I switched careers to make more money, beat your “failure by 30 if less than 100k in assets” challenge by a wide margin (had my first six figure year last year, though that doesn’t mean much these days), bought the motorcycle, travelled the world, rented and invested, but there is that itch and it grows the older I get. I’d like somewhere permanent to call home, as I’ve had to move a couple times playing the rental game over the last 8 years. I want to have neighbours that don’t suck, knock down some drywall that belongs to me and without alcohol being involved. A dog even. Wow, that would be something. I love German Shepherds, but I’ll never have the space to treat a friend like that properly.

Each year, no matter how well I do at work or in my portfolio, it seems to make less and less financial sense and becomes more fraught with risk. I save 30k, market jumps 50. By the time I have $300k invested, it’s going to make even less sense to buy than at 150.

How little sense am I willing to have? My life would be way easier if I just stopped giving a crap. Good thing I’m patient, because it looks like I really don’t have any other options. I don’t have mom and dad to shovel equity at me (and even if I did, I can’t imagine having so little decency as to actually take the money) and I’m too ugly, getting too old now to marry someone rich.

The perfect is the enemy of the good. All this time I thought I was taking the good, but really I was holding out for the perfect.

Chinese consumers can now buy Canadian homes online through a deal inked with Juwai.com, China’s largest real estate website selling international properties, and JD.com, which is China’s largest retailer, both online and offline.
The tie-up allows JD’s customers to view and purchase real estate listings for properties from Canada, the U.S., Australia and the U.K. directly on JD.com’s shopping site.

What ever happened to “ this will not end well “ ?
======================================
Depends on how you interpret the “end” and “well” (and for whom).

Garth has a tendency to ‘massage’ the past to fit the present. Of course, predictions are inherently hard, especially about the future…as someone has said.

I guess, having such a presence as a semi-public figure, I’d imagine he cannot really reveal ‘certain’ truths – as it may create a panic and everyone gets hurt by it. So, terms like ‘slow melt’ rather than ‘crash’, even though no-one really knows how things will go. Too many moving parts to be able to accurately predict the rates.
The thing is, prices should’ve corrected in 2008-9 as in the US (perhaps not as much), but the emergency rates and longer amortization periods prevented this natural phase to play out. Canadian Banks received $80B to ‘shore up Balance Sheets’ (ie. the CDN version of a bailout), and the oligopoly was intact once again. Never made the ‘news’ though…we’re all dialed into the US fiasco. The fractional reserve system of fiat money was allowed to carry on as if nothing had happened.

It really boils down to this folks: are we ever going to see ‘normal’ prices that are congruent with incomes (the 3-4x gross family income)?
If you believe ‘not’, then buy now (if you can afford, as Garth says).
If you believe ‘yes’ (as I do), then you wait it out.

Regardless, we should be prepared to live with the consequences of our actions. Whining won’t help anyone – it’s just annoying!

My next door neighbor growing up was a star throughout high school and uni.. runs world markets for a bank in NYC now. I guess if she was an average banker she’d be working in Canada… like these analysts who spewed that. But I must admit I admire their optimism. They too, sound like they bought into the groupthink that led y’all here.

#121 BK on 04.05.18 at 9:34 pm
I guess it’s time to buy in Vancouver. It’s not going down according to Garth. At least not that much anyway. Better investment than all the $$$ I’ve lost in the stock market lately. I wish you could be consistent. I’m being spun in circles.

FYI, no price drops anywhere in BC. Still going up.

I said Vancouver has not yet started to correct seriously to the NDP. How could you miss that? The level of sloppiness among commenters tonight is breathtaking. – Garth

I think Garth is trying to manually pop the bubble by goading the readers to flood the market with low ball offers.

Because I find it really hard to believe that someone so knowledgeable about housing is suddenly satisfied with a minor blip that in values that doesn’t even begin to bring housing prices into reasonable territory. Especially not someone who thought housing was overpriced in 2009. Jesus Christ, just be real with us.
————
I need to write in crayon, apparently. Where prices for detached have dropped by a third (as stated) and sellers are stressed, why not offer? Study a little history – there has never been a correction of a greater magnitude in the last 50 years. How much clearer does this have to be? – Garth
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“Study a little history – there has never been a correction of a greater magnitude in the last 50 years.”
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In all fairness (assuming this still counts), we’ve never had this set of circumstances in the last 150 years – so the last 50 years are not a proper sampling period.
This situation is basically an ‘experiment’ by CBs and we really have no precedent to make proper reference to.
Unless I’ve missed it, where have we seen ZIRP/NIRP for an extended period, as we have in the past 9-10 years?
I’m bracing (and expecting) for the worst bear since the Great Depression. This will affect ALL asset classes (not in tandem), and I hope I’m wrong… but I’ve been trying to make it a habit of being ‘right’ (it’s more fun and profitable!) :-)

A lot of people here seem to be looking for someone to make all their decisions for them, and someone to blame when they don’t get their shiny new house that the helicopter parents promised they could have.

Guess what? If you make all of the biggest decisions in your life based on a single person’s blog, you deserve what you get. I don’t care how cool the blogger is. Read more, learn more, consider that you may be wrong about everything, and them do what is best financially for you and yours. Buy, sell, hold, wait, diversify, whatever.

But most of all grow up. Make your own decisions and take responsibility for them. Garth is not your nanny, and unless you pay him he is not your financial advisor either.

I stop reading for a few days and the post subject becomes ‘The last post’. How times can change! I may need to email you instead for a daily dose of your wisdom Mr. Garth! Otherwise, please reconsider and just ignore the idiots in the comments section

#71 “Under IFRS-9, that changes. All loans, except for credit cards, are automatically considered impaired after 90 days of non-payment. That includes CMHC’s obscenely long 365 day window, for accounting purposes at least. This is already making dramatic changes to the numbers banks are reporting…”

That is just one factor out of many. First of all the housing bubble was built on cheap ,easy and fraudulent credit. I know countless “owners” who found a mortgage broker who played with the numbers so they could qualify (this was at LOWER RATES using fake income). People were able to borrow fake equity HELOCs to keep afloat which is now closed. Incomes flats and interest rates are rising. The last flow of millennials are done as pre b-20 suckers are about finished. Brampton is a sea of fraudulent mortgages the likes I am sure will come to light in due time. Every buyer of just four years ago will admit that if they had to buy today they couldn’t. Who will be the magical buyer now? The laws of economics can be bent with fraud and easy credit. Now interest rates and new rules will bend the laws back to normal. the mean average is normal and that’s where we will go. Realtors and the banker shills have made wrong predictions all last year and will continue to lie all the way down JUST LIKE IN THE US. Remember Canada’s housing bubble is way bigger.

Happy Housing Crash Everyone!

P.S I have been enjoying you SHYSTERS suffering with no sales and no money . :-))

You people who are blaming Garth because you followed his advice and didn’t buy real estate 4 years ago before the huge price escalation have no one to blame but yourselves. Stop whining and take some responsibility for your own actions or lack thereof.

Hope the “joke” is that this is your last post. As a relatively new reader (~2 years) I hope you continue as your insights have been of extreme value to a young professional getting started in life, love, career and investing. Not real estate yet ;)

In case this is your last post I’ll share a pearl of wisdom my parents shared with me in a April of last year whilst they tried to convince me to make an offer on a house in Toronto (don’t hold that against them) which may help to explain things to many posters here: “It’s never been easy for most people to buy a home.”

Doesn’t that go counter to the theory of them being the drivers of RE price stabilizing/grinding up, regardless of the bottomless funds of BoM which we know doesn’t matter? More so in a rising rate environment? something doesn’t add up

The cost of houses will SLOWLY reduce as the cost of money goes up, Basic Economics 101. The cost of money is indeed going up. May be in fits and starts and go backwards sometimes but the general direction is up. The low cost of credit cycle has finished.

Renewals will sadly be a shocker for many. Higher rates mean that folk will qualify for less credit. Multiple that by 100,000 families and you have gently declining RE markets. There may have been a starter fast price drop but from now on it will be either gentle reductions or price stagnation. Garth is correct on this score. How do I know this, well I am a retired university professor lecturing in business matters. I taught this stuff.

RBC is talking crap. How can they possibly say that rising rates will bring home prices back up. the two trends are opposites. They are just trying to cover themselves from legal challenges from their previous ridiculous pronouncements which they stupidly put in print.

All that said one has to wonder how it is possible for Canada to have ordinary family million dollar houses in a a country of lots of land, low wages and such a high cost of basic living.

I’ve been waiting for a crash in Alberta since 2007.
I bought in Edmonton at age 24 in 2008. My house value has gone up maybe 5% in 10 years.
Prices doubled from 2005 – 2007. Thanks to 40 Year amortizations, No downpayment Mortgages, lax lending practices. It was a bubble, propped up by good paying jobs. House prices will not be going down in Alberta. They will stay plateau’d for another 10 years.

Love your blog Garth have been reading for a few years and appreciate all the time & effort. Moderating the comments section can’t be easy. I hope you continue.

I was already a homeowner when I started reading but still found your advice relevant and sound. We are in the process of renewing our mortgage now and are having a hell of a time with all the new rules, and property is worth about 30% less than it was last year. Thanks to you and this blog none of this was a surprise to me and we are dealing with it accordingly.

There is a clash happening in the comments section that involves Garth’s years of experience and wisdom conflicting with the feelings of a large group of people that for years have been angry about the realities and consequences of vastly unaffordable homes. Regardless of who will turn out to be right, I see no winners, just a huge steaming pile of debt.

At current stock valuations, which are also propped up by cheap money, we’re not expecting a recession?

Your rationale only makes sense if you admit that true inflation is in the area of 15-20%. In-turn this means that the monetary system that you ‘apply logic to’ day-in and day-out (work and blog) is pretty much just voodoo (which it pretty much is yet very few of us are aware of).

6. Boomers are finally realizing there is no more reason for them to delay cashing out of their home and move on to retirement- prices no longer going up. Their detacheds will finally hit the market
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I wouldn’t hold my breath on that one Becky. As the top end of the boomer generation, most boomers I know have no plans of moving out of their homes until they are carried out. So, no big surge in listing from this group for at least another 10 years.

Folks don’t want to take responsibility for their choices. Would rather blame GT for ‘spinning’ them and causing them to lose possible ‘huge gains’ in housing that they never would have made because they didnt want to take the risk and/or couldn’t or wouldn’t think for themselves. So they found an echo chamber for their thoughts, and a place for their conceit to live online. A delusion where they could be heroes in waiting. Now feel ‘betrayed’ by someone stating their opinion on a blog for free. A fellow human, not God. The ego needs something to blame, but not itself.

Be a real person that speaks the truth and knows themselves and accepts what fate brings with equanimity. Make the choices you can live with, and be honourable. Good things will come to you, maybe in house form, maybe not. But good things will come.

Last post? Say it is not so! I’ve really enjoyed your many blog posts enlightening and informing us on so many financial topics in such an entertaining way. Without a doubt, your blog post really help me understand Canadian finances. So just want to say thanks and I hope you carry on with your crusade to make the average Canadian financially literate.

Even Mafia bosses have responsibility for their people/circle and probably much more integrity than politicians.

Affordable, considering income, is housing at 300 k in GTA and normal interest rates, not at 1.5 mil.

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#97 Entrepreneur on 04.05.18 at 8:46 pm

And Stan Brooks on a recession coming and possible depression (my quick notes get scattered). Maybe that is what the banks are worried about. Oh, I think so too but without the crazy housing economy we would have gone into one long ago.

Who has a working job; who has money; who has debt; and are people having kids/having families; buying with money or with credit.

The houses are too expensive, the rents high, food goes up then open up the newspaper and more homeless.

Really? Do something Canada!!!

———————————-
I understand your pain, but it is already too late.

The time to take the pill was in 2009.

Now is judgement time/day. Food inflation? Who would have thought… certainly not Mark with his deflation theories …

I guess rich people should be expected to pay more for food. And we/the general population should be considered rich, as we can ‘afford’ 1.5 mil houses in GTA/apparently Garth thinks that this is a fair price, as economy ‘roars’, people with no money want to buy ultra-expensive houses borrowing from their parents who will never retire, and we have inflation.

If rates keep going up because everything is awesome in Canada, then shouldn’t that suppress borrowing, driving down what people can afford, and driving down real estate prices?

I mean let’s take your logic to the extreme, imagine Trump somehow magically fixes the US economy and is nice enough to include Canada in it’s prosperity.

Everyone has a sweet gig making $80k a year and life is amazing. Interest rates start rising, they hit 5% by next year. People would be going broke everywhere, no one could afford a $900,000 house at those rates. Prices must drop.

Top experts across the country has disclosed that capital flight is flooding out of the country. How can the economy be ready to start moving? Trudeau and his tax killing Liberal menace and the NDP are watching the fastest collapse of the economy in history. Trudeau is spending billions on a phony prop up ‘infratstructure spending’ but that’s debt not GDP.

Yes, reading comprehension and math are not common skills. But irony certainly abounds in the steerage section. I will now elaborate on some of Garth’s points:

Point #1 – No Canadian RE correction has exceeded roughly 30%, ever. So in areas where these levels have been reached (or close to them), now is a good time as any to try, but only if you can *actually afford* to buy! As some have pointed out already, a 50% rise gets erased by a 33% drop, so keep that in mind!

Point #2 – Newsflash: there are hordes of “Mills” out there, who are not only now the largest generation, but also, the house-horniest Canada has seen yet and the least afraid of debt-for-life in history. So, even though their jobs may not generally pay much today, there are lots of them lusting for bricks and they will find a way to get that coveted mortgage for life (inheritances, anyone?). Sooner (rather than later) as old folks retire or expire, Mills will move into higher-paid positions and become the demand that will strengthen ALL markets, from stainless and granite, to avocados and fair-trade weed products, and even ETFs! Also, are there mandated restrictions on amortization periods by mortgage lenders today? If car loans are now routinely made for 84 months, why would banks not apply the same strategy for housing? Longer amortization = manageable payments for borrowers *and extremely juicy profits* for lenders (for life!). That is a win-win, in today’s brave new world.

Point #3 – Not all areas of Canada will correct at the same time or to the same extent. So while some places have dropped already by double digits, many other places are flat, or have increased. Ditto for housing types. Condos and townhouses are still “affordable” and “hot”, so moisters could continue to flock there, propping the market.

Point #4 – While many of us posters have developed a strong dependency on the messages from this blog for moral support and to preserve our sanity (sometimes), Garth owes us nothing and calls things as he sees them. We cannot seriously depend on a man and a blog to tell us when and where to buy: each person here has made their own decisions and we ourselves are responsible for their outcomes – good and bad.

Point #5 – Like it or not, economies *everywhere* are growing, in spite of absurd politicians, conflicts, natural disasters, etc. Canada’s indicators are green and if NAFTA gets renewed with limited negative impacts, the “good times” will continue. As crazy as it sounds, there is a chance the recently-initiated trade war could bring production back to North America, giving manufacturers a reason to avoid importing into the US and the tariffs on their products, by relocating factories here. Combined with favourable taxes and growing salaries and employment (US), a theoretical case could be made for the unorthodox tactics of the US government.

And really, if the whole point of coming here day after day, year after year, is to wait until the day we can all graduate into house-hornies for less, the blog’s name aptly describes us. I for once, have learned a lot about investing, dogs, taxes, and have enjoyed life a lot as a renter with cash to spare on, well… enjoying life! Fancy cars, vacations, investments, etc. and no debt. No mortgage and no “home” (LOL), for years, but top-quality fancy-house rentals and zero regrets.

So thanks! to this pathetic blog and no, when I buy, it will not be because Garth says so, but because I feel like it and can afford it (which has always been the case, but my landlords subsidized me, so why stop?) I do not care whether the darn house value is up, down, or sideways. It is shelter and shelter is an expense, nothing more.

Rant over. Garth, maybe you need a break from the comments section; we all do, perhaps. Stockholm syndrome, anyone?

Yes, but you predicted this a long time ago, when prices were very different. Words have meaning relative to a context.

“My advice was not to avoid real estate, but to buy within your means […] understanding a correction was coming. – Garth”

And it wasn’t coming. Or hasn’t come, at least, relative to the times the statements were made.

If we’re going to turn around and say that the current levels are justified, then it would be interesting to hear the reasons that it was “different this time.”

The price to income ratio is vertiginous. 5 was supposed to be a red flag–we’re closer to 10. I spent some time looking at household incomes in the city and comparing with prices all over the GTA and even the province. It’s a sea of absurdity, with everything being equally absurd, rather than locally absurd. Houses in places I never even know existed are pushing a million. Even Orangeville is expensive.

Whence the money to pay for this? It seems impossible. The inability to account for this money was what got me believing this blog back in the day. The graphs, the household debt, everything.

When you look at the data, the people who live in this city cannot afford the houses in this city.

I observed a almost u turn in your view last week from earlier posts. Earlier you stressed housing will be laggards for next decade. Not sure why buying a house not a bad view. Isn’t it catching a falling knife ?

But was a correction too unrealistic an expectation? I don’t consider 14% off after a tripling of prices over the past 8 years, and a quintupling of prices over the past 20, a correction. Not even a speed bump. Maybe a hiccup. Yes, a hiccup is the best way to describe it.

Garth,
Please forget housing for a while and just provide your perspective on Canadian personal debt, helocs, houses loans.
Regardless of whether hoses go up or down the debt is going to really hurt for many people going forward. Right? What’s your take?

wow/crazy mad peeps out today! I’m an alpha male so NO mandatory suck up for the garthinator!

With great power comes great responsibility.. Our kind scribe is taking a somewhat toned down stance on the RE market. Prudent I’d say.

Ship has sailed you made $$$$ I’d sell and get the windfall. Waiting on the sidelines eating spam and reusing tea bags? Go live a little and stop wasting away.

If I told you what I spent in the last 10-20 years on clothes, watches, cars, racks of lamb, booze, dating etc.. would make your head spin! I rent so I can afford to live that kinda lifestyle whilst I still can walk and dont have oldtimers. Already raised 3 kids with the financial commitment that came with it! yes THREE kids to adulthood.

Lots on this site just wasting away waiting for some future moment to say “I have arrived” too bad so sad.

6. Boomers are finally realizing there is no more reason for them to delay cashing out of their home and move on to retirement- prices no longer going up. Their detacheds will finally hit the market
—————————————————————
I wouldn’t hold my breath on that one Becky. As the top end of the boomer generation, most boomers I know have no plans of moving out of their homes until they are carried out. So, no big surge in listing from this group for at least another 10 years.

———————————————–

I concur with this. My folks are early Boomers and have no plans to leave their SFD in the 416 until they can no longer climb the stairs (and even then, they could always install chair lifts if they really want to stay). All of their friends are of a similar mindset.

Gen Z / Centennials will really have their pick of starter homes circa 2030. Boomers, dwindling in number, will finally be selling their SFDs to Millennials and younger Gen-Xers moving up. Millennials in turn will be listing their condos and townhomes in record numbers. The Centennial generation is far less numerous than Millennials. Advantage buyer. Lucky ducks.

I have been a reader of this blog for several years now.
Garth has always advocated BALANCE. Don’t have all your financial eggs in one basket. If you can afford a house, have a house. As he says, now may be a good time to buy, dependent on location/market of course.

I have always felt that the “rent don’t buy” crowd on this blog were justifying their lack of real estate by being “in the know” and to brag about their financial assets. Now they are blaming Garth for missing out on housing gains.

Timing is everything in life and only you can decide when to pull the trigger. Stop blaming a blog. Seek balance—have a house you can afford and financial assets.

If you haven’t made mistakes, including financial ones, then you haven’t taken on risk. Risk is what separates those that have and those that have not. Paying a gazillion dollars for a house is risky (as the Mattamy buyers at peak found out). Eschewing housing for the financial markets is also risky (even with a balanced portfolio).

Thank God, Risk can be mitigated through diversity. Some real estate exposure, financial market exposure, yes even some precious metals…ideally your assets create multiple income streams for you or provide tangible benefits, that are worth the opportunity cost. Every decision comes with an opportunity cost (if I buy that house, I am forgoing a purchase elsewhere). My metals produce no income but give me peace of mind and allow me to indulge a life long coin collecting passion that I really enjoy.

I live in a beautiful house on the water in the kawarthas. I am watching the ducks and the otter that lives in my backyard while I write this. I overpaid for this house by this blogs standards, Made it worse by sinking another $300k in it to completely gut it which didn’t help my portfolio, but I LOVE LIVING HERE. I will likely never get my money out of it, but that was my decision. My house gives me pleasure and my Reno ensured I can stay until the old home takes me (walk in bathtubs are cool lol). The point is, that money had an opportunity cost too and could have produced a lot of income for me. I decided to indulge my present quality of life instead of adding to my future. When you are diversified these types of decisions are easier and risk to your financial future is mitigated—you should have a little skin in the game everywhere.

Anyway, I don’t post a lot but read daily, including all the comments. Garth, thank you for all the laughs and your financial acumen all these years. You have given great advice and I for one, have always appreciated it.

No less than 44 per cent of investors who took possession of new units in 2017 were in negative cash flow — that is their rental income fell short of the amount needed to cover their mortgage payments and condominium fees, according to the study by CIBC and Urbanation, a market analysis firm.

Though 45 per cent of those investors were short by less than $500 per month, another 20 per cent were short between $500 and $1,000 per month. And 34.5 per cent were in the hole for more than $1,000 per month.

His posts remind of Smoking Man when he was trying to close on his house before taking off for greener pastures.

Are you planning to flee Garth?

The only reason I believe we are expecting further decreases in home prices is I have met many people who bought these houses and speculative condos in Toronto. They begged, borrowed and bent the rules to get into their homes with no regards as to how they were going to pay for these homes if mortgage rates increased above 2% – 2.5% or if they could not find a buyer for their flip as they never intended to pay the mortgage on their grossly overpriced home.

My estimation of the decreased in prices doesn’t even account for people losing their jobs or getting reduced hours at work due to homeowners cutting back on expenses to pay for higher than expected mortgages and housing costs (e.g. low maintenance fees going north of $500 a month) or landlords subsidizing their tenant’s rents to cover the full costs of owning rental condos and houses.

Greed took over the GTA very badly from 2014-2017. There are not many options for these homebuyers which will become more evident as the thousands of vacant flips and poorly designed newly constructed houses and condos struggle to find buyers as mortgage rates continue to rise.

I think we will see a 40% decrease in prices in the GTA over the next couple of years and I don’t know what the new construction developers will do when they find out many of the local investors/speculators are unable to close on the new houses and condos they completed.

The property market crash in the US preceded high unemployment and the recession. It was the cause, not a symptom. Canada has followed the same path by inflating an asset bubble, driven by rising collateral values. It will end like all debt bubbles. A rapid decrease in available credit, followed by a swift decline in the price of the assets used to support that credit.

It really begins this month when every potential homebuyer has their purchasing power cut by 20%.

Garth whom the God’s would destroy they first make mad as in crazy. Watch and learn. Protect yourself financially and even physically if need be. The events that bring mankind to it’s senses will be very ugly and very dangerous because they are too arrogant to accept the words of the wise and therefore they will have to find things out the hard way. Remember markets are not the only things that are cyclical.
Historical Cycles: Are we doomed to repeat the past?https://youtu.be/9w6QYPzF2TI

I certainly hope this blog doesn’t come to an end, especially over RE and the related denial as to what’s going on and why. I don’t even have any particular desire to buy or sell any RE. RE already causes far more trouble than it should, especially in Canada, so for it to kill this blog just isn’t right.

What I enjoy about this blog is learning how investments (whatever type they might be) are influenced by the economy, politics, and human behaviour. I love learning how Garth views things and watching how he weaves together complex information to provide clarity as to what causes investments go up and down. Even these last three posts – it’s clear that most people don’t (or don’t want to) believe what Garth has written but I’m more interested in learning what he’s looking at to know the RE investment is at the bottom of the trough. The pursuit is what intrigues me.

But I would also totally understand if Garth needs to take a break from it too. I know how frustrating it is when people have no idea or appreciation of the level of value they’re receiving from things like this. Especially when they’re getting it totally free. I’m not suggesting everyone has to agree with Garth – I don’t think he cares if you do or don’t – I just think he deserves a lot of respect for doing this almost thankless job. Nevertheless I’m thankful enough to have Garth’s contact information as a result of this blog because I’m just in the process of reorganizing some business stuff after which I’ll be contacting him to get the proceeds into something balanced and diversified.

#173 Smoking Man on 04.06.18 at 1:34 am
“When you realize that 1/2 drank micky of JD is missing.
You have had 4 glasses of wine and two legal approved by the wife shots of JD. You know if she finds the micky in the yard your life is over.”

What do you think that will do to the profits from the Jack Daniel Distillery? Why don’t you write a doctoral dissertation explaining to us all how China’s trade sanctions will not adversely affect Brown-Forman Corporation’s bottom line? Only a “genius” like you could pull that off! :)

Get out of Uni at 23 and get married at 26, 100G’s of school debt between them, 150 grand combined income. House shopping commences at 30 after they’ve scraped together 60K for a down, while getting started on the 10 yr OSAP loan payback.

Income 9400.00 Net/month

Osap Loan payments – 1100.00/month
Mortgage payment – 6000.00/month

Yikes, only 2300 left. That’s like 30% less than the small town min wage coffee servers I was talking about yesterday – and I haven’t even added in all the other costs yet.

Uh-oh, they’re over 20 grand in the red after only 1 year. The small town coffee hustlers were 10G’s in the black after paying all of the above.

Let do some cost cutting to be able to make the mortgage payment:

Cut out investing (2000)
Get rid of the car and walk to work all year round (450)

Phew, now they’ve got 750.00 month left over. But that’s STILL less residual than the small town coffee servers even though they are chucking 2K/month into investments. Not good!

So what have you got for a life? 25 years of no vacations, no investments, no toys, walking to and from work in the dark at -25 C, – but in 25 years you’ll own whatever 1.2 Mil gets you in the GTA – assuming you kept your job, and didn’t end up in divorce court (50/50 chance). 55 years old with a crap shack and nothing else – and that’s the best case scenario.

No thanks. If my household is raking in 150+K, I at least want to be able to afford a damn car to put in my damn driveway.

I had a meeting last night, and pulled into Timmy’s enroute to grab a coffee.

As I was ordering, a young raven haired Woman pulled into the drive thru after me. She was behind the wheel of an older F250 4X4. Blooming with youth, she had long straight hair that was black as spades, pale white skin, sharp red lips. Good grief, she was absolutely SMOKING.

I rounded the corner to the window and noticed she had a muddy YAMAHA GRIZZLY 700 SE in the box. I started having trouble maintaining my composure, and looked around for cameras thinking I might be in some kind of covert Toby Keith Country video.

Alas, it was just another evening in a smaller city where young folks can afford to drive gas guzzling pickups, and play with 12K toys after work.

I’ll stick with financial security and good times over being a slave to the bank to put a roof over my head.

Must be the ‘soft landing’ topic back on the table. Otherwise, there could be a bigger socioeconomic impact resulting from the crash. I don’t remember Garth to be a supporter of that. In contrary ongoing smear against the NDP bums who act like superstars, yet interfering with “greater design” resulting in politically induced collapse leading to severe recession. Garth’s frustration is still in my memory. I am sure that dialogue was initiated between self-raucous BC amateurs and feds in order to smooth things out. As demonstrated by various exemptions and amendments of newly introduced legislation. Obviously, that assembly was lacking supervision. Just like Ontario liberals and their little 1st-time buyer scheme back in 2016. Well, 30% or 35% off seems to be a good discount and sitting on the fence won’t help to grease the wheels needed for soft landing. Only I’m not sure if that’s fair to ask considering real estate valuation fundamentals. Yet the tradeoff could be a whole lot worst.

#71 AGuyInVancouver on 04.05.18 at 8:06 pm
“…The only way such an event could occur would be if conditions here mimicked those in the States when that market crashed. A serious recession. Double-digit unemployment. No available credit. And a housing market where people were too pooched or terrified to buy…”-Garth
_ _ _
Well, except those “conditions” were all the result of the housing meltdown, not the cause. The main culprit being securitized garbage mortgages.

—————————————————————–
Close, but no cigar. Securitization played a part, but subprime defaults as a share of total defaults decreased during the GFC. Prime borrowers defaulted. The upper middle class and up got into the speculation game big time, and a chunk of them got wiped. Same will happen in TO.

It always comes down to a mathematical exercise for me. Punch in the numbers for rent versus owning and review the results. If renting is cheaper take the savings and invest in an ETF portfolio using tax efficient strategies discussed here regularly and continue to rent. If the cost of owning become closer to renting with little savings difference then go ahead and buy with consideration to the loss of liquidity taken into consideration. Do your homework!

People want a messiah rather than taking personal responsibility for their own decisions. Garth – thanks for all the insights but my choices are my own and hopefully some of the people here will take ownership of their own.

I have the capital to buy a home but cannot rationalize the value at today’s prices (ore even part prices). I understand that at these historically low interest rates, the prices can work but I never believed that rates would stay this low for so long. That view has caused me to miss out on the recent rise in prices. If, like the US, we had experienced a major recession, I would have been totally right and many others would have suffered by buying with too much debt. I am comfortable with my bet because I believe wealth is found in the buying of assets and would rather miss a trend that doesn’t make sense than be on the wrong side if it did…

#121 BK on 04.05.18 at 9:34 pm
I guess it’s time to buy in Vancouver. It’s not going down according to Garth. At least not that much anyway. Better investment than all the $$$ I’ve lost in the stock market lately. I wish you could be consistent. I’m being spun in circles.

FYI, no price drops anywhere in BC. Still going up.

I said Vancouver has not yet started to correct seriously to the NDP. How could you miss that? The level of sloppiness among commenters tonight is breathtaking. – Garth

Here in Burlington the snow keeps falling on Apr 6-we gave a lot of money to Al Gore, Goldman and Wynne but we have to admit it-it was worth every penny spent-I am amazed at the results-it actually seems to be getting colder every year. Global Warming RIP.

Garth wrote – “Smart investors should have ignored the noise of the last six or eight weeks. People with money who want growth would be advised to get it working now, when the cost of good assets has declined, yet the world’s clearly expanding. You will see more of that Friday morning when the latest labour stats roll out. When you stand back, the view improves. Try it.”

I guess you want to take a mulligan on that payroll prediction. Horrible numbers. Yes, I am standing back and I see a recession looming in 12-18 months in the US.

I don’t agree with your recent housing prediction either. Are we not in a credit based system that is currently withdrawing access to credit after the largest credit expansion in the history of this country. Aren’t recessions the result of the contraction of credit and the resulting deleveraging of consumers to revert back to a more sustainable path? How then have we bottomed? We barely reverted back to the 2017 parabolic move. We need remove the 2016 move and then get back to 2015 prices and then overshoot to 2014 prices to have any meaning correction. This country is headed in a nasty recession in the next 18 months. We put it off with cheap credit and that is drying up now and salaries are flat. We haven’t had a meaningful recession since the 90’s, 2008 was a blip. We are well overdue and well over leveraged collectively.

Thanks for all the great education over the years – great stuff, especially on emphasizing the balanced diversified portfolio…. but I still think you’re wrong on your recent prediction on real estate – I don’t believe it’s bottom yet, given that interest rates are set to rise etc.

I’ll apologize in advance that this is an off topic question but I have Googled a few times and still can’t get an answere. Either it’s too specific a question for Google or I’m just wording it incorrectly.

What was the Basic Personal Amount in 2000?

I’d normally call an accountant but at this time of year I likely wouldn’t get a reply until sometime in May.

#190 Tactless on 04.06.18 at 8:15 am
Oh those Mattamy home buyers caught flipping homes and now are losing $$$. Love the buyer’s sentiment – Government responsible for saving foolish people from doing stupid things?

=====================

I read that too. Market price can go up or down, and builders have to adjust their price accordingly, so Mattamy is doing the right thing for their company. My biggest question was, if the price went up are they willing to pay more? This is just the beginning of the horror show and we will see the same story everywhere.

#181 Sunil Sharma on 04.06.18 at 4:40 am
I observed a almost u turn in your view last week from earlier posts. Earlier you stressed housing will be laggards for next decade. Not sure why buying a house not a bad view. Isn’t it catching a falling knife ?

============================

Things are very, very bad. So bad that we can’t even acknowledge it openly.

———————
It is actually a bad news, it is debt driven:
However, the data also reveal that 19,600 of the new employee positions were created in the public sector. By comparison, the number of private-sector workers declined by 7,000.

198 Gravy Train on 04.06.18 at 9:16 am
#173 Smoking Man on 04.06.18 at 1:34 am
“When you realize that 1/2 drank micky of JD is missing.
You have had 4 glasses of wine and two legal approved by the wife shots of JD. You know if she finds the micky in the yard your life is over.”

What do you think that will do to the profits from the Jack Daniel Distillery? Why don’t you write a doctoral dissertation explaining to us all how China’s trade sanctions will not adversely affect Brown-Forman Corporation’s bottom line? Only a “genius” like you could pull that off! :)
……

#187 CJBob on 04.06.18 at 7:52 am
#42 Stan Brooks on 04.05.18 at 7:00 pm
That is discrimination due to my gender identification.
_______________________
Based on your posts I’d strongly suggest going with the insanity defence.

Last post, eh? I don’t think anyone here has said or indicated that they hate you, though I can understand why you might feel that way.

You’re running a daily ideas blog about an emotional thing. With so many people, of course you’re going to have some disagree, sometimes passionately…. That’s just normal, if irritating.

I’ve got a healthy dose of regret, but no hate. I also regret not buying Netflix or Amazon. For the people wishing they bought, who knows how it turned out if you did. Maybe she left with half. Maybe you fell down the stairs and were paralysed. Those pasts aren’t any less real than the one where you’re living happily ever after as a SFH paper millionaire.

Still, regret is an eminently human, universal experience. It’s powerful. And you’re seeing a lot of it in your comments, Garth, but again I don’t know that you should conflate it with hate.

So here you are, with a large following of people sharing a similar experience, looking at you for advice. I’m not you (I mean, I wish), but wouldn’t it make sense to write about regret? Sack up and shut up may be good advice, but surely you have a little more insight than that?

Make that 70k – 80k in OSAP loans, since the kids today can’t get jobs, they think going to school for longer will make them more employable. I have met many people with post-graduate degrees doing data entry and other entry level positions.

It’s not uncommon for undergraduates with a Bachelor of Commerce to start as tellers at big banks. Most big banks and large corporations have new graduate programs that sometimes lead to better jobs, but they don’t accept many people and usually only graduates with 95% – 99.9% averages in school are chosen as the successful candidates.

The sibling of a friend of mine, completed his PhD. Then couldn’t get steady work as a professor (because teachers and professors rarely leave their jobs, so it’s hard for new educators to find work). He ended up going back to school and now is in medical school, so we won’t feel too sorry for him.

If the kids get a PhD and complete a post doctoral degree or two, the OSAP loan or bank student loans could be 100k – 200k. There are also specialty programs like the CPA (formerly Chartered Accountant) program, which costs about 20k after university and has a membership fee of over a $1000 a year for as long as the person wants to use CPA after their name. It’s tax deductible but it is an added costs, that keeps going up every few years.

Many careers or professions require continuing education courses that are not always covered by the employers to keep their designations up to date and their skills competitive for today’s workplace.

To the delusional s posting here thinking that house prices are going to drop 50% to 70%, I ask you why would someone give away their house when they are making the payments and jobs are in abundance? This is only a temporary correction and the government has orchestrated this and it is only temporary. Think about it, if prices somehow did drop by those huge numbers what do you think the state of the economy would be? Buying a house will be last of your worries.

Up around 30% past few weeks, IMO the ground is only beginning to tremble, I think you are early on calling the bottom, this is more like warning tremor before the big one hits. RE declined substantially but the companies underwriting it barely got touched, wait for the proper decline in bank stocks and that will show that the pain is now substantial enough for the next intervention. And trust me, there will be an intervention. its part of the cycle, cant break with history can we?

But that is my opinion and i have been wrong before. Looking forward to seeing how this plays out.

I’m looking at some areas in Toronto that haven’t had big declines. Assuming that I don’t have to borrow much – does my best day still come when rates increase (i.e. will there be a corresponding decrease in acquisition price)?

#173 Smoking Man on 04.06.18 at 1:34 am
When you realize that 1/2 drank micky of JD is missing.
You have had 4 glasses of wine and two legal approved by the wife shots of JD
You know if she finds the micky in the yard your life is over.
………………………………………………………………….
Holy $hit Smoking Man your wife must be as dumb as a doorknob or just plain stupid to not recognize your drinking habits and your hiding spots.
But then again she did marry you!

#173 Smoking Man on 04.06.18 at 1:34 am
“When you realize that 1/2 drank micky of JD is missing.
You have had 4 glasses of wine and two legal approved by the wife shots of JD. You know if she finds the micky in the yard your life is over.”

What do you think that will do to the profits from the Jack Daniel Distillery? Why don’t you write a doctoral dissertation explaining to us all how China’s trade sanctions will not adversely affect Brown-Forman Corporation’s bottom line? Only a “genius” like you could pull that off! :)
……………………………………………………………..
War is hell and nobody ever wins!

The current boom in condo prices — driven by tight supply and soaring demand — won’t last forever, he cautions. Roughly 60,000 new units are currently under construction in the GTA and 20,000 new units are expected to be completed ANNUALLY between now and 2021.

***

To cover carrying costs of units pre-sold this year and scheduled for completion in 2021, investors with a 20 per cent down payment would need to raise the rent by 17 per cent over the next four years if there were no change in mortgage rates, the study finds. If mortgage rates increase by 100 basis points, rents would need to increase by 28 per cent over the period and by 39 per cent if rates increase by 200 basis points.

I’m sure local speculators didn’t pay 20% down, more like two mortgages HELOC (pay only interest) + private lender down payment (to be paid by tenant’s rent) with the hopes of selling the unit within the next 5 years, before maintenance fees get out of control to make a 100% return on investment (so they think).

How long will their bank allow them to put the monthly costs that the rent didn’t cover on their HELOC before they conduct a stress test and decide to drastically increase the rate on the HELOC or have their house appraised and reduce the HELOC amount?

I suspect the problem is many of the people that come here and write about how prices are only going to come down more haven’t got their “stuff” together to buy anything. So it is easier to say they are waiting for conditions to align.

I have a prediction…and I play with my own money. Sharp recession in 2020 after cash and tax incentives have settled. Trudeau will be out but it won’t matter, Canada’s main drivers will take years to restart. Stock markets will be 40 to 50% lower as weakness must be shaken out of prolonged QE. Massive job loss…new Canadian govt unable to spend from bare cupboards after Trudumb…..rates rising a wave forced foreclosures meaning anyone who buys today is roadkill.

I think everyone was waiting for this great reveal. You’ve had 14 years of a bull market at low interest rates for the bulk of those years, changing house purchasing rules and valuations departing from fundamentals, which is frustrating. The mind set has changed – people look at the mortgage payment as a rent payment. 2017 was peak house. 2018 begins the drop and slow melt. You can low ball, not stupidly, and see. You have a mexican standoff in the works – buyers waiting, sellers pulling back. You’ll have strong numbers in the US, rates increasing, pushing the B20 quals up. You’ll have less money for house. You’ll have people somehow being forced to pony up cash by their banks because house values are down, people decided to refi with a new bank, there are new refi’s coming in that need to be qualified. Its a changed world. There never should have been an expectation of 50% drops in all areas all the time because we’re a very local market and Canadians are used to being subjugants and ripped off. There is no plausible reason to be bullish on real estate in Canada or Toronto other than you “own” a house (or pay the Bank to own it) where you work. If you rent and invest your money you arguably can be much better off and buy that retirement home anywhere in the world where it counts.

Its sad reading these posts because everyone has got that wizard of oz thing happening. The great wizard turned out to be a midget behind a cloth, not some big fearsome badass.

Be smart- find a house. Run your numbers – if you were invested over the past 10 years and smart with your money you should be well positoned to put in a down payment. Or wait and see.

You can’t have affordability improving while rates are increasing – that shows the schizophrenia of the market that Garth has been talking about for years.

Get an agent to front you, but don’t sign a BRA. I’ve explained why many times.
Suggest a reasonable price you think is fair and affordable. If it’s a ridiculous low-ball offer the buyer may ignore you or sign it back for full price. In both cases, you’ve created animosity which won’t help going forward.
Include lots of conditions, even if you don’t need them. Financing, Home inspection. Water and septic (in the country). You can always strike them to assist in getting a better price as the negotiation goes forward.
Don’t make the irrevocable too short. People under pressure don’t cooperate.
Never offer after one showing. Go two or three times. Build the drama. You can afford to do this in a market with little buyer competition.
Big deposits always help get lower prices.
Don’t be too hasty with the sign-back. Wait until the end of the allowed period to respond. The seller will worry that you’re going to walk, and be grateful (and more pliable).
If the negotiations fall through, give it up. Take a few days or weeks off, then go in again. You may be surprised at the result.
…………………………………………………………………
OK just got off the phone with my wife and here is the story.
We live in midtown TO. Our neighbors listed Monday and sold Thursday. Before they listed it told then about your notes and recommendations. Especially about a BRA.
OK they did everything opposite to your above post as well as the purchasers. The purchasers went in firm, no inspection, no conditions sign back was within hours. The sellers got exactly what they asked for and are on the way to the golden lands. Actually the husband has a transfer to London Ontario.
So much for spreading your words of wisdom Garth.
We are all stupid or impulsive.

“StatsCan says the labour force produced 68,300 full-time positions last month and shed 35,900 part-time jobs. However, the survey shows that 19,600 of the new employee positions were created in the public sector, while the number of private-sector workers declined by 7,000.”

#203 – that rent calculator is garbage. Of course renting will be cheaper over the term of the mortage. There is no doubt that I could rent cheaper then what my 5 year term will cost.

What all these rent/own calcs miss is the long term impact of renting. If we stay in this house, it will be paid in 15 years and we will be rent/mortage free for the next 30 plus years. Thats 1-2mm saved on rent. How much is a 2500 sqft house going to cost to rent in 2038?

These calculators pretend that these mortage free years don’t exist, when reality is buying a home is all about getting to those mortage free years. We pay a premium early to reap rewards later. Thats not to say renting doesn’t make sense for tons of people but I’ve never come across a calculator that tells a 25-40 year story.

Given the above land prices will always absorb most of the income of most of the people. Because that’s what the entire system is designed to do: siphon off surplus value to rentiers.

This system works whether you are in a location where wages are high (urban) or low (rural). There is no mystical in-between area where life is amazing.

________________________________________

The only way the above could work is if every borrower takes every dime offered on every loan.

That would be pretty dumb, although I’m sure it happens plenty. If it does, then that’s the peoples fault, not the “system”.

I bought for less than 2X income taking less than half of what the bank offered. The system didn’t do jack to me unless I let it.

The mystical in-between area where life is great is anywhere that allows you to earn a wage that well covers the local cost of shelter and living. In my area of the Tundra, many households make 80-100K incomes via two people working. Houses run from 100K – 2.5 Million, choose your poison. A very nice place by anyone’s standard is 350K, although much less expensive ones are available all over.

We lacked for nothing, and it wasn’t luck.

All that stuff you’re talking about applies largely to big urban areas where folks have willingly decided to try and set up shop in the most expensive places in the country.

Make that 70k – 80k in OSAP loans, since the kids today can’t get jobs, they think going to school for longer will make them more employable. I have met many people with post-graduate degrees doing data entry and other entry level positions.

It’s not uncommon for undergraduates with a Bachelor of Commerce to start as tellers at big banks. Most big banks and large corporations have new graduate programs that sometimes lead to better jobs, but they don’t accept many people and usually only graduates with 95% – 99.9% averages in school are chosen as the successful candidates.

The sibling of a friend of mine, completed his PhD. Then couldn’t get steady work as a professor (because teachers and professors rarely leave their jobs, so it’s hard for new educators to find work). He ended up going back to school and now is in medical school, so we won’t feel too sorry for him.

If the kids get a PhD and complete a post doctoral degree or two, the OSAP loan or bank student loans could be 100k – 200k. There are also specialty programs like the CPA (formerly Chartered Accountant) program, which costs about 20k after university and has a membership fee of over a $1000 a year for as long as the person wants to use CPA after their name. It’s tax deductible but it is an added costs, that keeps going up every few years.

Many careers or professions require continuing education courses that are not always covered by the employers to keep their designations up to date and their skills competitive for today’s workplace.
__________________________________________

Yep. If you look at the numbers I use for different scenarios, they are always conservative. If I can make things sound bad with the numbers I use – the reality is even worse 100%! Everyone’s heard about the PHD’s driving cabs. It seems everyone has a degree or two these days, which makes them…average.

My wife has one of those jobs where continuing education is required for one of her designations – every year. Also liability insurance premiums too.

Kids need to be real careful deciding what they want to take in school these days. 50-100K debt is not to be taken lightly…

#222 Franco on 04.06.18 at 10:53 am
To the delusional s posting here thinking that house prices are going to drop 50% to 70%, I ask you why would someone give away their house when they are making the payments and jobs are in abundance? This is only a temporary correction and the government has orchestrated this and it is only temporary. Think about it, if prices somehow did drop by those huge numbers what do you think the state of the economy would be? Buying a house will be last of your worries.

=========================

The delusional is you.

With these arguments you can justify just about any price. Why not 5 millions, even 10 for SFH in GTA?

What is not normal is SFH priced at 15 times household income before taxes. Do you realize the stupidity of that?

#175 Stan Brooks on 04.06.18 at 1:40 am
#102 SoggyShorts on 04.05.18 at 8:59 pm
Affordable, considering income, is housing at 300 k in GTA and normal interest rates, not at 1.5 mil.
**************************************
So you think that a couple of part time minimum wage workers should be able to afford a detached home in the most expensive areas of the country, and that someone should be going to jail because that isn’t the case.

Ok then, here’s a challenge:
Pretend for a moment that you are supreme emperor of Canada, and explain exactly how you think you could accomplish that.

Affordable, considering income, is housing at 300 k in GTA and normal interest rates, not at 1.5 mil.
**************************************
So you think that a couple of part time minimum wage workers should be able to afford a detached home in the most expensive areas of the country, and that someone should be going to jail because that isn’t the case.

Ok then, here’s a challenge:
Pretend for a moment that you are supreme emperor of Canada, and explain exactly how you think you could accomplish that

======================

Here is how:

Transfer all the risk back to the banks along with all the ‘premiums’ and abolish CHMC immediately.

You must be really dumb to feel comfortable insuring somebody else’s risk with no profit for you.

Affordable, considering income, is housing at 300 k in GTA and normal interest rates, not at 1.5 mil.
**************************************
So you think that a couple of part time minimum wage workers should be able to afford a detached home in the most expensive areas of the country, and that someone should be going to jail because that isn’t the case.

===========================

By most expensive place in the country, you mean Markham, Mississauga, Vaughan, Ajax and Scarborough?

Did I say that dumps in New Market and Barry (with prices quadrupled in the last decade) are now more expensive than houses in Frankfurt, Germany, the financial capital of Europe (go there and see what free health care is) or twice a house in Costa Brava or Barcelona, I am sure New market and Barry are more attractive to foreign investors than Frankfurt or Barcelona.

in all fairness, I don’t think the economic outlook is as rosy as it seems. Both the US and Canada are slowing down considerably. Canada’s Real Estate markets are slowing bigly… and Real Estate and related services is a huge portion of our GDP. You dont think we’re going to see a huge slowdown with such low sales levels? Oil is back up above 60 but Canadian oil hasnt benefited too much from that. Last year’s economic “boom” was only because of the recovery from $25 oil.

I guess we shall see what happens, but I dont agree that this is over, not by a long shot.

Description Castle of the nineteenth century Near the Loire Located 150 km from Paris in the Loiret near Gien. Property consisting of a park with castle built in the center of a territory of a total area of 40 hectares spread over 29 hectares of woods, 10 hectares of meadow and two parts of water. This beautiful house dating from the nineteenth century offers beautiful open views facing south, southeast, and west

2. Beauty in Bradford at 1.3 mil Canadian – cardboard particle home with 3 (three) bedrooms.

RBC’s new survey is full of optimism. The kids will be roaring back into the market any day now. The correction is over. Mom and Dad will be gifting down payments like never before. Even Garth has bought into the narrative of a brief correction. He might be right, but all the metrics are still really ugly.

Price-rent metrics compared to the US are brutal. Price-income ratios are even worse.

Is it really possible that Canada can maintain drastically higher home prices than the US on a permanent basis?

Liberty has cancelled Cosmos condos (believe all three buildings) in Vaughan.http://forums.redflagdeals.com/cosmos-condos-cancelled-2183979/
Now that got a lot of people screwed up who bought 1 or 2 years ago. Now, even though they will get their deposits back, it’ll cost a lot more to buy the same units as they did.
Lots of angry people over this and all blame Liberty greed for that.
So much from government to help with housing affordability for people. If Liberty truly was not able to get financing (which a lot of people doubt), they should not be allowed to build and forced to sell land to other more responsible builder.

#218 Smoking Man on 04.06.18 at 10:40 am
“Good news for me. Law of supply and demand. Jack goes on sale woohoo”

I take it you don’t have any shares in the company! Of course not! The only liquid assets you have are in Jack Daniel’s whiskey!

You obviously don’t care about the bottom line—which, by the way, is not one of the two tan lines left by your wife’s bikini bottoms! (Just hope and pray the company doesn’t shut down its Tennessee operations.) :)

“In 2015 the Internal Revenue Service released a memo indicating that the basket option was an improper maneuver to convert short term capital gains into long term gains. To date, there has been no public announcement of any Federal regulatory action taken against Renaissance or Mercer over the $6 billion tax avoidance scheme.”

A typical 4 bed in Frankfurt: “Recent price increases mean that a four-bedroom single-family home with a small garden — and “if you’re lucky, a nanny room” — now goes for about 2.4 million euros (or $2.7 million), up from around 1.6 million euros (or $1.8 million) a few years ago.”

Well, I don’t know what happened my earlier post. I didn’t even get a “Deleted”. I guess my comment wasn’t appreciated ;) I’m capitulating. I’m no longer going to argue with or try to dissuade anybody about it being different here this time. Apparently it is. Good for me since I bought a townhouse, albeit a modest one, 5 years ago, at least.

#251 Mattl on 04.06.18 at 1:16 pm
#203 – that rent calculator is garbage. Of course renting will be cheaper over the term of the mortage.
——-

You say “of course” about a situation that has basically never been seen in the history of amortized mortgages. If renting is cheaper than buying, why would anyone rent a place out to someone else? That would be dumb. You would be giving someone a service (use of the place) for less than it cost you to buy the service.

As for the calculator, I think you either didn’t look at the specific one Mr. Bonddd shared, or you didn’t see how to use it.

To figure out if there is an advantage to the use of the home at the end of the term, you need to look a whether or not that is offset by the equity from savings at the end of the term. For example, if you have a million dollar home that you rent for 2000/month (with a 2% annual rent increase) and I have a million dollar home that I buy with a mortgage at 3% (assuming no taxes or maintenance, and also assuming prices stay flat), at the end of 25 years, you have a million in cash, from your savings, and I have a million dollar home paid off. We are in the same place. You could buy my house for cash and start enjoying the same rent-free lifestyle as I have.

You need to put in all your assumptions about taxes and maintenance and appreciation, and if one scenario puts you ahead with respect to the other, that’s the one you should go for.

“As of February one of every 1,012 ‘units’ in the state was a foreclosure, said Bayard Williams, president of the Delaware Association of Realtors. This puts Delaware among the top five states in the nation in terms of high foreclosure rates. The damage caused by the recession appeared for many in the loss of home equity, said Mr. Williams. Homeowners who may have refinanced on their homes before the recession hit found themselves in a particularly bad position.”

“‘When they refinanced, they pulled as much equity back out as they were allowed prior to the downturn in the market — when the market went south, they ended up upside down on their loans,’ he said. ‘We’re even seeing some people who’ve been in their homes for 20 or 30 years trying to sell and you’d think that they’d have a lot of equity at that point to put toward closing costs and the purchase of their next house. But, that’s not always the case anymore.’”

. “WFLD-Ch. 32 news anchor Sylvia Perez and her husband recently sold their four-bedroom, 4,375-square-foot house in Hinsdale for about $1.33 million. The couple paid $2.2 million for the house in 2006. They first listed it in 2013 for $2.399 million and later cut their asking price to $2.199 million, $1.995 million, $1.95 million and just below $1.8 million. ‘We had it on the market for four years, and it did not move,’ Perez said. ‘It definitely was time to downsize; we would like to have downsized years ago when we put it on the market, but we got caught up in this financial downturn in the housing market like everyone else.’”

“Residents at Millennium Tower, San Francisco’s leaning, sinking skyscraper, are scrambling to sell their multimillion-dollar condos. Residents say they’re selling their homes short of what they paid for them, with about 100 condos falling $320,000 in value on average.”

“Real estate sales in Manhattan plunged 25 percent in the first quarter from a year ago, as the new federal tax law, stock market swings and a glut of luxury condos spooked buyers. Prices are also under pressure. The average sales price dropped 8 percent compared from the same quarter last year. The high end of the market is getting hit the hardest, since it’s the most discretionary segment. Prices for luxury apartments in Manhattan fell 15 percent and sales were down 24 percent in the quarter from last year.”

“With so many luxury apartments still overpriced, they are now sitting on the market on average of more than a year and a half — a 50 percent jump over last year. ‘The next couple of years will be all about price discovery,’ said Jonathan Miller, president of Miller Samuel.”

If this the end, thank you Garth for 10 years of outstanding columns of financial, RE, market advise.
You have widened my horizon and entertained me on about half of those blogs, most read in the last 5-ish years.
My last post will end it with a rant against TPTB…..and a song that you can listen to while reading my LAST rant:
The Doors-The End Live…https://www.youtube.com/watch?v=6FMGYycBAMU

This quote from the article sums up the psychology of those buyers nicely:

“It’s not something (the government) could have forgotten about. It’s something they dismissed,” said Khan. “There’s some level of accountability with everybody and nobody’s stepping up.”
…..+
==========================
#56 MF on 04.05.18 at 7:24 pm
#39 Looney Baloney on 04.05.18 at 7:09 pm
“We knew the FIRE industry was too big to fail and so policy makers need to pander to these legit scum bags.”

You think a notion that he was misled by government/lending institution/real estate cartels won’t stand out in court?

I beg to differ.

We need to identify the responsible and put them in jail. Period.
+++++++++++++++++++++++++++++++++++++++++++++
Update from previous post—-No. 3,004 April 2nd, 2018 #103 where’s The Money Guido” on 04.03.18 at 12:53 am
I’ve always said it must be gangs laundering money, BUT, let’s take a look from another angle.
Who has the most money and who stands to gain the most from RE transactions and prices rising, whether rates are low or high?
THE BANKS!!!!!! And the FIRE industry…….
Who has the deep pockets to hold properties empty to get the best price.
THE BANKS!!!!!!
How close are the realtors and mortgage brokers connected to these banks? Answer: they are joined by the hip and all flows through THE BANKS!!!!!!
I could be wrong but hasn’t all Canadian banks been tied to money laundering with Manulife just paying a paltry $1.5 million to atone for admitting to laundering.
I’m thinking it’s all a plan to tie bank obligations for life for ALL hard working Canadian serfs.
Somebody please prove me wrong as I’m losing all faith in the FIRE industry especially banks since my “bank” Coast Capital CU in BC went against my wishes to opt-out and installed a program run by MX Technologies out of Lehi Utah (https://craft.co/mx-technologies: a small $50 million company; now why would a multi-billion $ bank award a huge contract to such a small company?), a short 15 minute drive to the huge US-NSA data center in Utah’s Silicone Vallley.
My financial info is now, without my permission, out of the country thereby possibly bypassing ALL Canadian privacy laws.
After speaking with BC Privacy Office, BC/Canadian law says MX has to adhere BUT when have banks and their partners adhered to laws not in their best interest, just look at HSBC in the US:https://www.marketwatch.com/story/netflix-documentary-re-examines-hsbcs-881-million-money-laundering-scandal-2018-02-21 andhttps://www.telegraph.co.uk/business/2017/12/11/hsbc-spared-us-money-laundering-sanctions-battles-clean-act/. The story say it all.
Who will do a documentary on Galen Weston and Loblaw’s $404 million Canada Revenue battle that includes setting up a bank in Barbados and being the only customer:http://www.cbc.ca/news/business/loblaws-cra-glenhuron-bank-barbados-tax-1.4490564
If you have a money manager running on your bank account owned by a foreign-US company, I believe you too have sent your info out of country, maybe whether you agreed to it or not and it “might” be shared with many companies that don’t have your best interest in their plans and out of the purview of Canadian laws.
Just look at the main investors in MX, venture companies and a huge insurance company conglomerate run for military personnel. USAA is a Texas-based Fortune 500 diversified financial services group of companies including a Texas Department of Insurance-regulated reciprocal inter-insurance company. We know how Texas regulates, just look at the Bushes, Enron, too many to mention. Just watch the movie: Patent Scam……Make sure you don’t have a small company that would prevent you from fighting patent infringements, because small companies in the states are being sued for using cell phones!!!!! You have to watch that movie, it’s coming to Canada now that they have all your info!
Coast is denying I opted out and have gladly “disabled” that money manager but only after all my info has already been given to MX.
Something smells really bad in Canada and we serfs are being lied to left and right.
So Coast’s Privacy Commissioner initially tells me that they didn’t send info offshore but then admitted that they “only” send transaction data info to MX.
Now insurance conglomerates have purchasing info from which they can ascertain your lifestyle and use that info against you for a myriad of FIRE conglomerates, after you pay your premium obviously.
Hope you are prepared for more rip-offs coming down the pipe as that huge data center with all our Canadian financial info pukes out plans to divest us of our money and put us further into debt, just as their connected companies devise ways to eliminate our jobs.
I concur with Stan Brooks on the jailing of the upper crust miscreants who created this soup bowl of servitude and who blatantly wave their “better than thou” formula of driving most well meaning people into the poorhouse while chomping on the spoils of OUR hard work. And this includes most politicians-bureaucrats-all oligopolies since I graduated high school 40+ years ago and started caring how my hard earned money got STOLEN.
Rant off…
It was a blast Garth, thanks for letting me try to inform, as most repeat posters wanted to do……

#249 Fake News…..good observation…..numbers out of Trudeau all fake. The job creation numbers are sprinkled among the loyal voters in newly forming ethnic ghettos. The “infrastructure spending” is all just pandering to the ( in Ontarios words) the ‘otherwise unemployable’. The spending is all temporary….ergo direct debt…not GDP…..while still dragging Canada’s energy patch down with pony dancing and flighty postures hoping that he can keep dancing until the announcing of capital flight has bled the country to zero. I don’t know how the media is thinking it’s OK to support the stripping bare of Canada’s coffers by the incompetent Trudeau Liberals. Obviously they’re licking their chops at the prospect of the media funding bill passing and licking up because of it. Imagine the hate that will pour down on the liars once these scammers are outed. You

Do not Worry QE4 is coming…and fewer interest rate hikes in Canada…..central bankers won’t let their friends go BK…the party is just getting started..Trump just pumped another 890 Billion into the military…Petro Dollar Hegemony…will be here for 1000 years…what we need now is hyperinflation with low interest rates…and we can just inflate our debt away…aaaaaaaaaaaaaaahhhhhhhhhhhhhh

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The views expressed are those of the author, Garth Turner, a Raymond James Financial Advisor, and not necessarily those of Raymond James Ltd. It is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor's circumstances and risk tolerance before making any investment decision. The information contained in this blog was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. Raymond James Ltd. is a member of the Canadian Investor Protection Fund.